2019-11-11 • Updated
US equities ended mostly higher yesterday in the post-holiday trade buoyed by gains in technology, healthcare in and financial shares. A recent drop in oil prices dragged energy stocks a bit lower but failed to divert the composite indices from their overall bull rally.
S&P500 is currently moving within the consolidation range of $2405 – 2450. Until the lower border of the range is still intact we expect it moving sideways.
Nasdaq ticked a few points higher today to $6150. It has a room for further extension towards $6343 (its all-time high). On the downside, there is a solid support at $5995 (18 May low).
A divided FOMC meeting minutes released overnight also helped the US shares to climb higher. The minutes indicated that some members are concerned with the inflation picking up in disaccord with the Fed’s monetary policy stimulus removal. As for the discussion on when to start the process of balance sheet wind down, the Fed is divided. Some suggest it can start as early as September, others are not willing to pre-commit to a start date this early. So, in the future, tepid economic data (a miss on the tomorrow’s NFP, e.g.), as well as inflation rate below the Fed's cherished target, may have a bearing on the Fed’s plans to hike one more time this year and to commence a balance sheet run-off. This would be extremely positive for the US equities as lower interest rates make them more attractive than saving money in a bank or holding government bonds.
While in the short-term there might be some retracements in the US equities, in the near-term we expect them to rise higher as soon as second quarter earnings data is published. Some analysts project surprisingly strong releases. The early results from the reporters like Nike, Oracle and Darden were truly impressive. Profits from the companies that have already posted their earning are up nearly 12% from the second quarter results of last year. These early indications might not be sufficient to be extremely bullish on the US equities though. Earning season has not really started yet. It won’t commence until July 14, when JPMorgan and Wells Fargo start reporting their profits, but we might be encouraged at least by this early reporting and wait for even better prints.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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